State Announces Settlement With
Verizon Over Its Advertisement And Sale Of FiOS Service

NEWARK – Verizon New Jersey, Inc. (“Verizon”) has agreed to a settlement with the Office of the Attorney General and the Division of Consumer Affairs to resolve the lawsuit arising from its marketing, sales, billing and customer service practices for its FiOS television, telephone and internet services.

Verizon has agreed to pay $795,000 to the state in civil penalties and reimbursement of attorneys’ fees and investigative costs. In addition, Verizon will provide a $50.00 prepaid gift card to the 1,160 consumers who submitted complaints to the Division, and if any consumers so opt, will terminate their FiOS service without an early termination fee.

Verizon also has agreed to retain at its own expense a Consumer Affairs Liaison who, for a one (1) year period, will assess Verizon’s compliance with the terms of the settlement and submit quarterly reports to the state.

“Companies must deliver services at the terms advertised and represented to consumers. This settlement demonstrates Verizon’s commitment to do right by its customers and to adhere to our consumer protection laws and regulations,” Attorney General Anne Milgram said.

In entering into the settlement, Verizon made no admissions of liability or wrongdoing.

The state filed suit against Verizon on March 16, 2009, alleging that the company violated the Consumer Fraud Act and Advertising Regulations in its advertisement, door-to-door solicitation and sale of FiOS service. Among other things, the state alleged that Verizon failed to provide advertised promotional gifts such as flat-screen televisions when consumers signed up for FiOS service, and charged consumers higher prices for service than prices quoted in door-to-door solicitations and advertisements.

“Consumers want crystal clear television when they sign up for FiOS and they deserve a crystal clear explanation of service terms and conditions,” said David Szuchman, Consumer Affairs Director. “This settlement ensures that consumers will get what they are promised when signing up for FiOS service.”

The settlement is memorialized in a Final Consent Judgment, in which Verizon agrees to:

Ensure that the inventory levels of FiOS promotional gifts are reasonably sufficient to meet consumer demand;

Ensure that consumers receive such promotional gifts within the represented time period;

Make available an item of equal or greater monetary value, if the promotional gift supply is exhausted;

Clearly and conspicuously disclose in any advertisement either the quantity of FiOS promotional gifts available or use a phrase such as “while supplies last” or “limited availability”;

Clearly and conspicuously disclose any limiting factors (i.e. time period) affecting a consumer’s eligibility to obtain a FiOS promotional gift, FiOS promotion and/or FiOS service in its advertisements

Determine a consumer’s eligibility for any FiOS promotion on the date of order, not the date of installation, of the FiOS service;

Equip its ordering and billing systems to link any FiOS promotion with specific eligibility requirements so its sales representatives know whether a consumer is eligible for such FiOS promotion at the time of the order;

Provide consumers who are eligible for FiOS promotional gifts with all necessary instructions and/or paperwork to claim such items;

Provide consumers with written notification, via email, letter or postcard, of the status of any FiOS promotional gift for which they have qualified within seven (7) days of ordering or installing FiOS service, whichever is earlier.

Provide a copy of the document to the consumer within five business days after the consumer signs any contract, order form or written commitment for FiOS service.

Not quote one price for FiOS service through advertisements, door-to-door sales or otherwise and then bill consumers at a higher price;

Not charge consumers an activation fee, after Verizon’s sales representative waived such fee at the time of order, whether or not through door-to-door sale;

Enable its ordering systems serving Verizon’s customer service centers to display an estimated first bill for FiOS service at the time a consumer orders FiOS service;

Review the estimated first bill with the consumer at the time of order and advise the consumer of any estimated pro-rated amounts, one-time and monthly charges, taxes and fees;

Send consumers who order FiOS service through Verizon’s customer service centers, a copy of the estimated first bill via email or first-class mail within seven days of ordering FiOS service; and

Provide a toll-free telephone number to address consumer inquiries as to FiOS service, FiOS promotions, FiOS promotional gifts, customer service and assistance, billing and other services.

Deputy Attorneys General Alina Wells and Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section, represented the state in this settlement.